The report shows an example of a group cost estimate for product P-102.
Group costing displays the following:
Proportion of product costs that are incurred overseas:
This enables you to anticipate the effect of exchange rate changes on the product costs.
Contribution of each plant to the product costs:
This enables you to decide where to produce products and whether to shift production from one location to another.
Contribution of each profit center and business unit to the product costs:
This shows how internal suppliers add value to your product and helps you identify the organizational unit that has the greatest potential to reduce costs.
Based on the structure of your company, you can interactively change the sort order of the partners.
Note
Group costing represents the ability to view the contribution or the value addition of a product across multiple company codes. It uses a special procurement key to identify procurement relationships across plants. It is possible to obtain the cost estimate from the initial plant to the final production plant prior to the sale of the product outside the corporation.
The following are the requirements for group costing:
- All partners should belong to the same controlling area.
- Cross-company costing should be enabled.
- The partner version should be assigned to the costing type.
Cost Component Split by Partner
Group costing generates parallel cost component splits for each material with the value added by each partner in the production process. When a resource is costed, the system automatically determines the partner that supplied the resource, such as the company, plant, profit center, and business area.
A separate cost component split is generated for each partner. In the example provided, the cost component for each plant involved in the manufacture of R-1000 is displayed in a different color. If you do not need a high level of detail, the values added by the other partners can be displayed as a subtotal under the value added by the direct partner.
Group costing can be used only if all the companies are assigned to the same controlling area.
You can define whether you want to calculate and store cost component splits by partners in customizing. To do this, define a partner version and assign it to the costing type. The partner version specifies the level of detail to which you want to maintain the partner information, such as company code, business area, plant, and profit center.